The Bitcoin frenzy has made it very difficult to understand blockchain technology and advanced ledger technologies. Until they are more easily understood, B2B interests cannot take advantage of the potential profits. But that won’t be the case for very long.

Blockchain is a sophisticated algorithm created for cryptocurrency. It drives a distributed data structure that manages electronic cash movements. It replaces the administrative role of a central bank or government backing.

The blockchain is the repository and distributor of virtual coins. Crypto-coins are not carried or handled, but they do trade, multiply and function thanks to the blockchain at the center. If you picture a business ledger that updates itself in real-time, multiplying that picture by billions of data spaces will give you some illustration of the way blockchain works.

For B2B companies, it can be a virtual bank—moving money, accepting deposits, completing transactions and more. This differs from online banking where your business is subject to regulation, monitoring, business hours and other restrictions.

How Does Blockchain Technology Help B2B companies?

Efficient supply chains. The blockchain is open to all members of the network. An IBM report notes, “This ‘shared version of events’ enables improved supply chain efficiencies, better multi-party collaboration, and streamlined resolution processes when exceptions or disputes occur.” It does not replace legacy chain supply software, but it engages new realities like the expanding data flows presented by the Internet of Things.

Improved sales processes. “The B2B sales process is based on relationships and responsibility,” said Jeremy Epstein, blockchain marketing expert and CEO of blockchain consulting firm, Never Stop Marketing. B2B sales relationships are ongoing, have a longer lifespan, and in general, require a longer sales cycle than B2C sales. “Trust is essential to B2B sales success and blockchain technology represents a way to expedite the creation of trusted relationships at lower costs” he continued. His eBook, The CMO Primer for the Blockchain World, points out that only 50% of businesses check buyer credit worthiness, request secure forms of payment, or both. And 81.5% of companies report employing credit management policies to mitigate trade risks.

Ease and speed. Joe McKendrick points out that, with this open access system, “blockchain's value proposition is that it takes out the middlemen in transactions, enabling more autonomous types of engagements.” Easing and escalating the speed of financial transactions, blockchain replaces banks, credit card processing and checking. This reduces cost to B2B vendors and customers.

Beyond fintech.B2B Business Network believes, “Outside of fintech applications, blockchain has yet to make its impact felt.” However, contributor Derek Handova predicted B2B applications will catch on soon. In 2016, the writer saw it serving only the finance/tech world. But, he envisioned future value in real estate transactions, identity management, healthcare records and more. He called it a “Swiss Army Knife of technology.”

Safe and secure.Phoebe Luckhurst insists, “The future is in the chain.” But she also admits that the blockchain is only as good as its code, and codes have been cracked. Goldman Sachs agrees on its credibility, calling it “a faster, safer way to verify key information and establish trust.” And Professor Kevin Werbach at Wharton refers to “a new architecture of trust,” a system where you do not deal with an intermediary person, institution or authority.

Real savings. B2B merchants in retail or online need the cost savings promised by blockchain dealing. First and fundamentally, it speeds the transaction, immediately moving the customer payment to the vendor. Second, this speed ripples back through the supply chain and forward to the customer’s satisfaction. Third, it facilitates distribution and logistics, increasing efficiencies down the line. And, fourth, by bypassing credit card processors and other merchant services, blockchain reduces the overhead reflecting the price of service.

Blockchain is Picking Up Velocity

This technology may have the public confused. Most people had never heard of it until Bitcoin started to catch everyone’s attention. Virtual coinage and cryptocurrency are a long way from being ubiquitous terms, but that is changing fast. Epstein notes, “We are living in the ‘age of accelerations,’ as Tom Friedman calls it. In fact, there are studies out now that say millennials would prefer to hold cryptocurrencies over stocks. Granted, some of that is due to the crypto-mania currently taking place, but it is noteworthy.”

A closer look at blockchain and distributed ledger technology reveals the deep impression it has made on major banks, Big Data, social media platforms, browser powerhouses and eCommerce leaders. IBM is already using blockchain in its television commercials for business cloud services.

The next generation of providers and consumers will know the tools and language well. The transactions will be second nature to them, and anything not blockchain will seem archaic, risky and foolishly expensive. The reality is, most people will not even know they are using a blockchain back-end, but just like WiFi, fast internet, and phones today, in the near future the expectation will be intermediary-free transactions.

The cryptocurrency platforms have invited people to come to them. Other than the sophisticated code, they have no product to offer. Conversely, a credit card provides the illusion of cash that is on hand and available. Thanks to some governmental oversight, we have credit card statements that we almost understand. The public has adapted to this, psychologically.

Likewise, the business owner has become used to established routines and GAAP oversight. This significant shift in ledger processing will come with a learning curve, and although the new systems would immediately benefit eCommerce, it will require a revolution in how online marketing and sales occur.

We can anticipate a time when blockchain will ensure even greater security, more practical applications and customized products. When customers find it cost effective and easy to navigate, the market will follow.

“There’s a saying in the blockchain world,” says Epstein who works with blue-chip crypto projects like OpenBazaar and Zcash. “Five months in crypto is like five years in the regular world in terms of change. My advice is that it’s better to spend the time now to get prepared than to get caught blind-sided.”

How long this transition will take is anyone’s guess, but it’s gaining momentum. Increased trust, security and efficiency will always help B2B companies compete. Blockchain can build all three.

Founder and CEO of By Monday, Inc., a consulting firm that accelerates B2B sales revenue through strategic alignment and innovation. I previously worked as president of VitalSmarts for 9 years. I wrote the book Indispensable By Monday, which teaches employees at all levels t...